13 February 2013 15:08 [Source: ICIS news]
LONDON (ICIS)--The European February monoethylene glycol (MEG) contract settlement remains unresolved, as buyers refuse to accept to the initial agreement of €1,105/tonne ($1,493/tonne), sources said on Wednesday.
"Producers are willing to settle but they can't find a buyer for the settlement," a producer said.
Buyers said the number is too high, and some have compared it unfavourably to lower spot prices.
The bulk spot price is quoted around €900/tonne CIF (cost, insurance and freight) NWE (northwest Europe).
Sellers are under no real pressure to sell and supply is finely balanced ahead of a series of planned outages, but quiet demand is hampering sellers' efforts to push spot numbers up.
Depending on individual discounts, current European values are relatively low when calculated against a contract price of €1,105/tonne.
The upward trend in contract price nominations in Asia – the dominant market – continue, as a major supplier nominated a rollover at $1,310/tonne (€969/tonne) CFR (cost and freight) for March business.
The upswing has been ongoing since August 2012, apart from a blip in December of the same year.
After months of delayed settlements, buyers and sellers said the initial European February MEG contract settlement was early.
"The first number was very early. It is not so late in the month," a second seller said.
Nevertheless, the wait for a conclusion does not sit comfortably with the market in these uncertain times, and several buyers are gearing up for a possible double settlement with February and March.
"We plan to get compensation in March," a buyer said.
A second buyer added: "I think [the February contract] will be combined with March."
This situation was reversed in January, when producers held off agreeing to a €20/tonne increase from December until it was eventually concluded at €1,068/tonne FD (free delivered) NWE, alongside the initial February contract.
($1 = €0.74)
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